China's Huawei and ZTE grilled by U.S. committee over spying concerns

Michael Kan |
Sept. 14, 2012

A U.S. congressional committee appeared to come away still in doubt about the security of networking equipment from Chinese firms Huawei Technologies and ZTE after holding a Thursday hearing in which the two companies tried to dispel allegations that they were tied to the Chinese government.

A U.S. congressional committee appeared to come away still in doubt about the security of networking equipment from Chinese firms Huawei Technologies and ZTE after holding a Thursday hearing in which the two companies tried to dispel allegations that they were tied to the Chinese government.

"I'm a little disappointed today. I was hoping for more transparency, more directness," said the Chairman of the U.S. House Intelligence Committee, Representative Mike Rogers. "There is a sphere of government influence in your companies of which you either can't identify their roles and responsibilities or won't. Either way, its unacceptable."

Thursday's hearing was held as part of an investigation launched by the U.S. House Intelligence Committee to find if Huawei and ZTE posed a security threat to the nation given the increasing cyber attacks allegedly coming from China. U.S. officials are concerned networking gear bought from Huawei and ZTE could in fact be used by the Chinese government to spy on U.S. activities and steal sensitive information.

Both Huawei and ZTE, however, have tried to clear their reputations and on Thursday executives from the companies denied they had any ties with the Chinese government, stating that their firms would never sabotage a customer's network. Both companies are also committed to improving cyber security, and following U.S. laws, they added.

"Huawei is an independent private employee-owned company," said Charles Ding, a corporate senior vice president with the company. "Neither the Chinese government nor the PLA (People's Liberation Army) has an ownership interest in our company, or any influence on daily operations, investment decisions, profit distributions or staffing."

"The Committee's central question has been: would ZTE grant China's government access to ZTE telecom infrastructure equipment for a cyber attack?" said Zhu Jinyun, ZTE senior vice president for North America and Europe. "Mr. Chairman, let me answer emphatically: No! China's government has never made such a request. If such a request were made, ZTE would be bound by U.S. law."

During the congressional committee's nearly year-long investigation, Huawei and ZTE have tried to answer questions regarding their operations and financing. But despite the efforts, Rogers said in the opening of Thursday's hearing that the companies had provided "little actual evidence" to resolve the committee's concerns, which included refusing to provide certain documents because they would violate China's state-secret laws.

"It is strange the internal corporate documents of purportedly private sector firms are considered classified secrets in China. This fact alone gives us a reason to question their independence," Rogers said.

But Huawei's Ding said in a written statement for the hearing that the company had already provided a "wealth of information." Some of the information asked for would have also been impossible to provide under the three-week time frame the committee had given the company, he wrote.